Bitcoin in Backwardation (This is Fine)

One of the joys of having a futures market is the ability to understand what investors are thinking about the future of the price. For bitcoin, it doesn’t seem so great at the moment. 


As we can see, the contracts for the bitcoin futures on the CBOE are currently in backwardation, meaning that contracts with a later expiration are trading consecutively lower.

Of course, something like this might have made me nervous on a normal day, but then I remembered that oil futures were trading in contango (opposite of backwardation) before the prices collapsed back in October.

Also, the volumes here are kind of silly. I mean, 227 BTC (less than $1 million) trading on a contract that expires today. Sure, the title is catchy but what can we really learn from this?

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

Shutdown: Day 26

Day’s to Brexit: 72

Constantinople Delayed

Please note: All data, figures & graphs are valid as of January 16th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

You may have noticed that we’re now including a countdown to Brexit in the highlights section, right next to the US government shutdown counter. I think they fit together neatly. Two governments descending into a state of turmoil over political wrangling.

Today, Theresa May’s government will see the ultimate test. If she loses the vote of no confidence, the UK heads to new elections… again.

Over in the East, China decided to inject the market with a record level of stimulus. Yesterday’s tax cuts may have been insufficient to maintain growth, so they’ve gone the route of free cash for the market.

In addition, it seems the Institue of International Finance has made a rather shocking estimation. It seems our entire economic system, from our homes to places of work and our governments are increasingly reliant on debt.

Given all the above, it’s no wonder that the European Central Bank is now sounding a new alarm.

Don’t worry about any of this though. The stock markets are up today. Hope the earnings reports from the financial sector go well.

Ethereum Upgrade Delayed

After all the excitement, the crypto community was disappointed to hear last night that the long-awaited Constantinople upgrade has been delayed once again.

It seems a critical bug was found at the last minute and the lead developers pulled the plug. Here we can see the crypto market, led by Ethereum, dropping moments after the announcement was made.

We’re seeing a bit of a recovery this morning but that was really scary. I mean, it’s good that they caught the bug before going live but the fact that it came within 30 hours of the upgrade is a bit nervewracking.

These things do happen, virtually all major platforms including Windows, Android, and Apple Operating systems, have seen critical bugs before. Though it would be possible to release a patch, fork the network again, and return to normal, that kind of process could in itself have done irreparable damage.

We hope that Constantinople whenever it is ready, goes through without any additional hitches.


This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets. 

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies are not supervised by any EU regulatory framework. 

The post Bitcoin in Backwardation (This is Fine) appeared first on Bitcoinist.com.

Source: Blockchain

Quantum Threat

quantum computers

IBM has just come out with the world’s very first commercially available quantum computer known as the Q System One


For those of you who aren’t familiar, quantum computers think a bit differently than the PCs and smartphones we have now and are much better at solving complex mathematical problems.

The release of this new computer instantly piqued the interest of some members in crypto who asked: “does this new quantum computer threaten bitcoin?”

The answer as usual, can be found in the video archives of the great Andreas Antonopoulos who said explains…

The threat of quantum computing is only real if it’s available to one actor and not to others. Even still, if a person did manage to develop their own supercomputer, bitcoin would probably be too small a target to waste it on.

Meaning, if quantum computers are readily available to everyone, then the entire bitcoin network will upgrade together and there is no threat.

When I tweeted this answer out yesterday, I was delighted to receive further clarification from legendary cypherpunk and cryptographer Adam Back, who I had the pleasure of meeting at a bitcoin birthday party last week.

In these three tweets, Adam explains that the Q System One is “super weak” even compared to a 1972-era computer. Furthermore, there are quantum resistance solutions currently in bitcoin’s development roadmap, although we may be decades away from it even being relevant.

“#bitcoin can calmly & slowly watch QC…”

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

Patience Policy

Shutdown: Day 21

Bitcoin’s new Range

Please note: All data, figures & graphs are valid as of January 11th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Jerome Powell, the Chairman of the US Federal Reserve Bank, answered questions at an event yesterday and clarified the Fed’s position on monetary policy, just as the markets were hoping.

The Fed is currently the biggest player in the market, so this is a pretty big deal. Jay, as his family calls him, stressed caution and patience above all when dealing with interest rate hikes. The markets were previously expecting two or three hikes this year and it seems like Jay is trying to bring them down to one or less.

There was, however, a noticeable drop down in the Dow Jones when they discussed the Fed’s balance sheet. Not that anything critical was really discussed but it seems to have become a trigger word for the markets.

The truth is that according to the explanations given last night, it doesn’t seem like they have any plans at the moment and rather will act according to the situation when the time comes. It’s a bit disappointing on one hand because “forward guidance” was a theme stressed by Powell’s predecessors, Bernanke and Yellen. On the other hand, perhaps now we can quite Fed watching and let the markets be a bit more independent.

Still Shut

By tomorrow, this will have been the longest government shutdown in US history.

Jay Powell also gave a rare comment on this last night saying that usually, shutdowns don’t have a great impact on the economy because they don’t last very long. However, if we were to see a prolonged shutdown the implications could be very big indeed.

For example, one of the wings currently closed is the Consensus Bureau, who is responsible for putting out critical economic data like retail sales and GDP. If those stats aren’t published, investors, economists, and even the Fed will essentially be flying blind.

Bitcoin’s new Range

You’ve probably already noticed that Bitcoin and the other cryptos took a sharp plunge yesterday. Actually, two sharp plunges.

As we discussed in yesterday’s update, there appear to be no specific reasons for this drop and it’s more likely due to the lack of liquidity inherent in the crypto markets, possibly mixed with some large orders being placed on exchanges.

If yesterday’s explanation of no specific explanation annoyed you in any way, you’re really gonna love this next one.

The total movement of 12% from peak to trough was actually insignificant. All we’re seeing is a movement from the top to the bottom of the range. Check it out. Here we can see bitcoin’s price since it first fell below $6,000.

As we’ve been discussing since mid-November, the current range is from $3,000 to $5,000 (dotted blue lines). It seems now, that bitcoin has opened a new mini-range within that from $5,550 to approximately $4,200 (yellow lines).

Movements within a range can sometimes be sudden like we saw yesterday, but unless there’s a breakout of the key levels there really isn’t much to write home about.

Wishing you a relaxing weekend.


This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets. 

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies are not supervised by any EU regulatory framework. 

The post Quantum Threat appeared first on Bitcoinist.com.

Source: Blockchain

State of Emergency

emergency helicopter

The year has started with a bang! 


Stocks and cryptos are rallying strongly so far yet volatility is still really high.

This afternoon, we’ll have a special webcast at 3:00 PM GMT to discuss some of the main themes going into 2019 and how to position your portfolio.

This session is open to everyone and we’ll be honored if you can join us.

Feel free to register now at this link.

@MatiGreenspan

eToro, Senior Market Analyst

Today’s Highlights

Shutdown: Day 18

Volatility Still Elevated

Ethereum Classic Hacked!!

Please note: All data, figures & graphs are valid as of January 8th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Stocks have managed to rally off the lows and are now firmly in green for the year. Here we can see the Dow Jones’ all-time high in early October and the recent low from December.

There does seem to be some progress being made in the US trade war with China. The Fed also seems to be signaling that they’re less likely to be hiking rates this year. In contrast, the US government shutdown only seems to be heating up.

Today marks the 18th day of the partial shutdown and according to rhetoric from the White House, it seems that the President is willing to let it last an entire year if necessary.

President Trump has announced that he will address the nation tonight at 9:00 PM EST. Many expect him to declare a state of emergency in order to circumvent Congress in getting funding for the border wall.

Market volatility has come down a bit from the extreme highs of December but is still quite elevated.

Ethereum Fork!

So, there’s been a lot of confusion here and I’m very glad to cut right through this one for you and clarify.

First, some background… We’ve discussed already that the Ethereum blockchain is about to see a major upgrade. The name of this upgrade is Constantinople and it is scheduled for on or around January 16th.

Constantinople will be implemented as a hard fork on Ethereum. If you’re not 100% sure how forks work, please review this short explanation now.

In this upcoming case, the Ethereum upgrade has been widely embraced by the community and until now there have been no major players protesting Constantinople. So most likely it will be a smooth upgrade. This means that the entire network will probably implement the upgrade together and there will be no action required from the end users.

It’s important that we emphasize this because there are several projects out there piggybacking on the upgrade and taking advantage of people. One of which, called Ethereum Nowa appears to be an outright scam.

Ethereum Classic Hacked!!!

Not to be confused with Ethereum, Ethereum Classic is a legitimate fork of Ethereum. A disagreement among the community back in 2016 led to a chain split. Since then Ethereum Classic (ETC) has not done too well, especially when compared to her sister Ethereum (ETH).

Last night Coinbase put out the following alert on Ethereum Classic.

TL;DR: Etherum classic has been hacked!!

Explanation: The most common type of attack in crypto is known as a 51% attack. Basically, if a foul player manages to control more than half of the network’s mining power (hashrate), they can basically rewrite history.

Lingo: Rewriting history is also known as a reorganization or “reorg” and the most common reason to do this would be to create a double spend. Or, erase a previous transaction so you can get your coins back and spend them again.

Coinbase’s blog identified no less than 15 reorgs, several of which contained suspicion of double spend activity amounting to an approximated $1.1 million, which has been siphoned from the network.

Again, it’s important to understand that ETC is not the same as ETH. In the initial moments after the blog was released, both coins sold off in the confusion but ETH did manage to regain composure fairly quickly.

The reason is that Ethereum has a hashrate of about 20 times that of Ethereum Classic. So while it might be possible to temporarily get enough hashrate to control 51% of ETC’s network, it would be practically implausible to affect ETH in this way.

Putting things into perspective, if someone is dreaming about trying to 51% attack Bitcoin, they would need about 4,500 times the amount of hash than they do to attack ETC.

So, anyone claiming crypto is in a state of emergency is dead wrong on this one. Simply put, this is yet another great example of how negative news is nothing more than a learning opportunity. All the newcomers that joined crypto in 2017 should be much more comfortable now with how blockchain and crypto works and that is ultimately a good thing.

Have an amazing day ahead. Hope to see you at the webcast.


This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets. 

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. 

The post State of Emergency appeared first on Bitcoinist.com.

Source: Blockchain

Digital Diehards

Exactly 10 years ago today Satoshi Nakamoto set in motion his plan to create a new form of money that is independent of any government or bank. 


The evolution of bitcoin and blockchain over the last decade has been so remarkable that I’m sure even Satoshi himself could not have imagined the impact of his work.

Happy Birthday, Bitcoin!

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

Flash Crash Rips the Currency Markets

Shut Down: Day 13

Crypto Flash Setup

Please note: All data, figures & graphs are valid as of January 3rd. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Yesterday afternoon, shortly after the markets closed Apple came out with a shocking report.

Shares of the world’s largest company fell about 7% in after-hours trading and are expected to open this morning with a huge gap down.

At some level, just about every investor in the world who holds a stock portfolio has some exposure to Apple shares, that includes most pensions and investment portfolios in the world. Apple has already been under pressure from the tech rout but this new leg down bumps up the severity and further jeopardizes the entire market.

It’s not just stocks that are affected by this either. Shortly after Apple’s announcement, there was some very peculiar activity in the currency market.

The flash crash impacted almost all currencies but was felt strongest in the Japanese Yen. Japan is still closed for the holiday, so the thin liquidity, especially during the wee hours of the morning when most other countries are sleeping, was also said to have been a trigger for this flash crash.

As you’ll recall, the flash crash that happened in the British Pound on October 7th, 2016, also happened during the early morning Japanese session when volumes are lowest.

Here we can see the scope of the crash in the USDJPY on three different time scales.

Also, the second most affected currency seems to be the Turkish Lira. In this chart we can see the USDTRY repelling away from 200 day moving average (blue line), that it has been testing for a few weeks.

Day 13

As the US Government partial shutdown enters its 13th day, tensions couldn’t be higher. A meeting between President Trump and the Democrats ended very poorly yesterday, with neither side willing to compromise over the budget.

Today will probably be more of the same illiquid flight to safety markets. but you never know really and a turnaround or even a flattening is always possible.

Tomorrow, we’ll receive the monthly jobs report from the United States. This oughta be fun.

Crypto Setup

Gains across most of the popular cryptoassets have been rather mild lately. While it’s good to see bitcoin holding steady, we’re actually starting to see a side of the market that is more typical during a bull run.

Surges in alt coins are suddenly getting more common. Though I can’t quite explain what happened to Paragon, a cannabis-related alt coin, that went from 16 cents to more than $10 and back within a few hours on Tuesday. This could very well be a product of an illiquid market, similar to what we saw above.

However, more serious projects like EthereumEOS, and Iota have actually seen sustainable double-digit gains this last week.

What’s becoming clear is that there’s a large disconnect between cryptoasset pricing and industry growth. My comments to this effect were covered by Bloomberg yesterday, and I’m now considering adding “digital diehard” to my bio.

Kidding aside. We’ve tried to call the bottom of this market several times now without success, so I’ll reserve my predictions on that front. But, what I can say is that crypto has evolved from virtually nothing into an entire budding industry within 10 short years. I can only imagine what the next 10 years will bring.


This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets. 

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. 

The post Digital Diehards appeared first on Bitcoinist.com.

Source: Blockchain

Tighten that Belt!!

mati greenspan

Over the last four years, the European Central Bank has managed to inject  €2.6 trillion into the banking system in order to maintain economic stability. 


To be clear, these cash injections have been one of the only things propping up the economy, and even the Governor of the ECB has now admitted that.

Now, €2.6 trillion may not sound like a lot of money but we need to consider that this money is then multiplied by the fractional reserve banking system with each Euro created then being lent out multiple times. So the actual amount of money that went into the system is much higher.

Here we can see the level of M3 money in the Eurozone going from less than €10 quadrillion to more than €12.27 quadrillion in just four years.

Yesterday, the ECB announced that they will stop injecting new money into the system. In the United States, they are already starting to extract money by allowing the bonds they’d purchased to lapse. In Europe, they’ll be renewing their bonds for now.

So, for those of you reading these daily updates and wondering what monetary tightening is, this is how it works and it is having a massive impact on the markets.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

Poor China Data

USD Getting Strong

Bitcoin Bulls are Still Bullish

Please note: All data, figures & graphs are valid as of December 24th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Stocks declined during the New York session yesterday. There were a bunch of headlines about a possible government shutdown but that’s probably not the catalyst for falling stocks. Just a sideshow distraction.

As we mentioned above tightening monetary policy is the driver here. During most of the year, stock bulls were able to say that the economy is still doing very well, but unfortunately, they don’t even have that leg to stand on anymore.

The US jobs report last week was dismal and the GDP in Q3 was a clip below the national average.

Things didn’t get much better in the Asian session either. Chinese investors drank their morning coffee reading headlines like this

To put the numbers into perspective, here is a graph of China’s industrial production since the crisis.

…and here is one for the retails sales. These are the lowest figures in more than a decade. An outright shock for economists whose forecasts were already low.

As you can probably imagine, the entire global stock markets are in risk-off mode by now.

USD Strength

In line with the risk-off mood, it’s likely that many traders are moving to cash. This could be the reason the US Dollar is testing new highs at the moment.

Here’s the graph we’ve been tracking that shows a rather clear ascending triangle for the US Dollar index. Definitely looks like a breakout pattern.

Similar to what we saw in August, the emerging market currencies are getting the biggest wallop. Here we can see the LiraRand, and Peso getting bucked.

At this point, only the Japanese Yen is a bigger safe haven but only slightly.

Bulls Gotta Bull It

To say that I’m bullish on bitcoin is an understatement, but even my extreme optimism is overshadowed by some of the other analysts in the industry.

As much as I respect Mr. Lee and appreciate his view, the above headline did raise a few alarm bells in my head.

In my personal philosophy, the market is never wrong. Fair value is what someone is willing to pay for it. I can understand how using metrics to try and determine what the price of an asset should be can be helpful. However, if nobody is willing to pay that amount, then it isn’t the correct value.

During the interview, Thomas even went as far as trying to reverse engineer his own calculations showing how given the current price of bitcoin, there should be far fewer active wallets. This thinking sounded a bit silly to me as well.

Sure, I believe that bitcoin can grow in value very quickly. After all, there is an extremely limited supply. But for that to happen demand needs to pick up first.

Have an amazing weekend!!


This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets. 

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. 

The post Tighten that Belt!! appeared first on Bitcoinist.com.

Source: Blockchain

The Future of Crypto

When the crypto bull market was still in session, the next big thing for Wall Street was set to be Ethereum futures. Now it seems they’re back on the menu. 


Futures contracts were originally invented so that farmers and merchants could hedge costs before engaging in a specific venture.

For example, imagine you want to drill oil and you more or less know your production costs but don’t want to take the risk that the price will drop by the time you’ve got the barrels ready for selling. You simply buy a futures contract for oil before embarking on the venture in order to lock in your profits in advance.

As the world goes further towards the tokenization of financial assets, the service of locking in future prices for Bitcoin and Ethereum could become essential for entrepreneurs. So, the CFTC in the United States is now asking the community for help to understand the industry’s needs so that they may accommodate them.

For those of you reading who are familiar with the ins and outs, please feel free to submit your comments to them using this link: https://www.cftc.gov/ PressRoom/PressReleases/7855-18

@MatiGreenspan

eToro, Senior Market Analyst

Today’s Highlights

Stock Rally in Suspect

Draghi Day

Have we finally found bottom?

Please note: All data, figures & graphs are valid as of December 13th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Yesterday’s global stock rally seems to be stalling today. Indices are in the green today but the excitement may be fading. With all the recent comments from economists about how the cycle might soon come to an end or that we could be heading for another crisis, it’s difficult for traders to fully buy into any upward momentum at this time.

Crude oil is also testing the lows at the moment, and if does manage to break below $50 a barrel it could be potentially destabilizing.

European Central Bank Event

By the time you get this, the European Central Bank will probably have concluded their press conference already.

At the moment, expectations are that they will continue to wind down the quantitative easing program or possibly end it all together. Even though interest rates are not expected to rise for another year or more, it seems apparent that the ECB is following in the footsteps of the US Federal Reserve in tightening up monetary policy.

Money has been flowing freely into global markets over the last decade and it’s going to be very interesting to see what happens when that money begins to be tightened once more.

Crypto Floor Possible?

With all the progress in the crypto industry lately, it’s extremely difficult to understand why prices have fallen over the last month.

Here we can see the massive slide down in bitcoin that’s been happening since November 14th. From its all-time high to the new low from last Friday bitcoin has fallen a total of 84%, which is more or less in line with the level of retracements that the asset has seen in previous cycles.

As we have previously discussed when bitcoin broke below the psychological level of $5,000, the current area of support is between $3,000 and $3,500. So we are very much in this area right now.

A breach to the downside could certainly cause further selling and a lower low. However, a strong push upward from these levels could actually serve to shift sentiment and change the trend.

With the high number of short sellers across various exchanges right now, even a small push up could potentially affect a short squeeze in the market. Imagine such a squeeze on the level that would bring us firmly above $5,000. Such a move would very likely be interpreted in hindsight as the capitulation that everyone has been waiting for.

Guess we’ll need to wait and see how it plays out.

Have a lovely day!


This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets. 

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. 

The post The Future of Crypto appeared first on Bitcoinist.com.

Source: Blockchain